Ripples In Corporate Space-Time: Do Companies Have An Internal Clock?

Did you hear all the latest buzz about those boffins (at Harvard-Smithsonian Center for Astrophysics) who just discovered gravitational waves? So we can actually measure time back almost to the time of the Big Bang? And they did it by actually showing the super-imposition of these waves on the Cosmic Microwave Background (Ok don’t ask but look here if you are as baffled by this as 99.9% of the population).

I mean it’s totally amazing. Here we are, these unmeasurable little creatures on an equally unmeasurably tiny planet on the furthest outreaches of a huge galaxy (still unmeasurably tiny in the overall scheme of things), and we can measure how big the (well, our) universe is, how it started (in this phase anyway) and at the same time prove that there are gravitational waves, whatever they might be made of. And we can measure back to the (almost) beginning of “time” (this time around?). Isn’t that truly amazing?

So what’s that got to do with this blog, you might well ask? Isn’t it usually about leadership and organizations as well as the odd meanderings about other more offbeat, but social subjects? Well, that’s a good question. Basically the news of this discovery (if that’s what it is) started me thinking about what links there are, if any, between cosmology, the universe and gravitational waves, and things (apparently) closer to home, like bad bosses, dysfunctional organizations and how to invent the next iPhone.

You see, what it got me thinking about was how things age and decay. What these smart boffins have discovered is a universal metric that stamps a celestial watermark on the background radiation in the universe so we can see this aging and decay process of the universe in action. Scientists call it entropy, the great unwashed call it aging.

So the question that occurs to me is the following: is there some sort of universal metric that can objectively show us how organizations grow, age and die? That is, is there an independent and objective way of identifying how an organization is ageing? That is, independent of its chronological age?

That isn’t a new question. We ask the same questions about humans. How can we distinguish between the chronological and physical age of a person. You know, you’ve seen the ads for it on the web, they call it your “Real” Age. What is the Real Age of your organization?

And for the Real Age for people, scientists have also found some answers too. We now know that everyone’s chromosones have things called telomeres at their ends, sort of like the cap at the end of a rope to stop it fraying. Basically as you age your telomeres get shorter. So a much better way to figure out how long someone will live is to look at the length of their telomeres rather than asking them their age. Is there an analog to telomeres for organizations?

Well I have an idea but it hasn’t made it to the textbooks yet (presuming even that it ever would). But my idea is that there is an equivalent and it comes straight out of another emerging discipline that we are all starting to hear about quite often, namely neuroscience and behavioral economics and finance.

Using techniques to probe the brain we are starting to close in on some of the neurological conditions that are associated with innovation. Our current theory is that innovation is not so much about intelligence and more about a particular cognitive bias, namely the status quo bias. The more you are prone to this (as we all mostly are), the less likely you are to innovate.

An organization that has more people with a lower status quo bias, think Google, the more likely it is to innovate. So in principle you should be able to see and measure this cognitive bias using diagnostic imaging and other techniques such as psychometric assessments based on a cognitive bias approach.

So voilà, instead of measuring ripples in space time, as the boffins did with the recently discovered gravitational waves, you are now identifying and measuring ripples in neurological and cognitive functioning. The more these ripples show a low status quo bias, the nearer you are to the organizational beginning. That's because the lower the status quo bias, the higher the innovation and the more likely you are to be starting a new company.

A new company (when successful of course) has high growth. That’s like our universe at the beginning with explosive growth (how about Facebook, Instagram of WhatsApp in the early stages?). In universes we call this early explosive growth, inflation. In organizations we call if high growth.

So in principle we can measure this stage neurologically by measuring the status quo bias in the organization. The higher the proportion of people with a low status quo bias, the younger the organization and the lower its Real Age. The higher the proportion of people with a high status quo bias, conversely the older is the body.

So these neurological ripples across the organization are a watermark which in principle shows us in an objective way what the time is on the internal clock of the organization. In this case, we could also rephrase this to say its innovation clock. When an innovative organization starts their internal clock is just after dawn. By the time they get to be like some of our more mature big companies, the clock is at 5 minutes to midnight.

Don’t believe me? It has been reported that of all the Fortune 500 firms in 1955, 87% had disappeared by 2011. Companies basically are born, grow, get fat and happy and then mostly die or go into senescence. Most of don’t see or understand that because it usually takes more than one working generation to see it and in most cases people aren’t employed in the same company long enough to ever see it in action from start to finish.

So companies, just like universes, start with a Big Bang, go through high growth, and then the puff slowly goes out of them as the status quo bias sets in and the innovators leave. At the end of the process it dies or goes into suspended animation, barely subsisting. All of this can be seen in principle through the equivalent of organizational telomeres, namely the relative level of status quo bias in the organization.

So, on this reading, the evolution of universes isn’t really so different from the evolution of companies and leadership. Both are born, grow fast and then die. And both the universe and organizations have an internal clock, if only we care to look for it and find it. Of course, the universe hopefully isn’t going to die anytime soon. But it will undergo its Big Crunch (the opposite of the Big bang) sometime in the future, even though we won’t be around to witness it.

The question for you then might be, what is the Real Age of your organization? Is it early in the morning or late in the evening? How can you turn the clock back if it’s looking a little late in the day?

About the author

Dr. E. Ted Prince is CEO and Founder of the Perth Leadership Institute, which has developed unique leadership assessments for financial leadership and business acumen. He is the author of The Three Financial Styles of Very Successful Leaders, published by McGraw Hill in 2005 and since published in China, India and Taiwan and Business Personality and Leadership Success: Using the Leadership Cockpit to Improve Your Career and Company Outcome published by Amazon Kindle in 2011. He has numerous publications in the area of leadership, management, human resources, business strategy and technology and is a frequent speaker at industry conferences. He has held the positions of Visiting Lecturer at the University of Florida and Visiting Professor at the Shanghai University of Finance and Economics.
Dr. Prince has been CEO of several companies in the technology area over a period of 20 years including Chairman and CEO of a public company for 6 years. He has also been on the boards of numerous other companies including several public companies.
Dr. Prince holds a BA First Class Honors degree in languages and political science from the University of New South Wales in Sydney, Australia, and MA and Ph.D., degrees in political science from Monash University in Melbourne, Australia.